Which of the Following Is TRUE

question 49

Multiple Choice

Which of the following is TRUE?

• A) Large numbers of securities are required to achieve diversification.
• B) Portfolio risk can always be reduced by adding additional securities.
• C) Systematic risk can never be eliminated.
• D) Non-systematic risk can never be reduced.

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Definitions:

Controllable Costs

Controllable costs are expenses that can be regulated or influenced by decisions made by managers or individuals within a company, allowing for adjustments based on operational needs.

Responsibility Accounting

A system of accounting that segments performance by areas of responsibility within the organization, allowing for better monitoring and accountability.

Activity Index

A measure used to allocate overhead costs, based on activities that drive costs such as machine hours or labor hours.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, allowing for more accurate budgeting.